lender for more than 10 properties

[Christine Kankowski]

I seem to always hit a snag when trying to get a loan for my 11th property.  I have a few that I would love to get loans for , but seems like the interest rate jumps when I get to #11.

Does anyone have other options with similar rates for loans?  Can I lump several properties together and get one large loan? All are cash flow positive and have been owned for 5+ years. 

[Kevin Romines]

@Christine Kankowski I have talked at length about this very subject. As any investor goes, eventually they get to this point. You can get Fannie Mae loans beyond 10 financed properties, but in order to do so, you must also get portfolio or commercial financing set up. Fannie Mae view's LLC's differently then they view Sub S or C Corp loans.

If you were to take 1 or more of your existing portfolio and move it to a Sub S and then refinance it with a portfolio lender, you then have opened up the slots of available loans that you can do through Fannie Mae financing. Fannie Mae doesn't consider a property that is financed in the name of the Sub S or C Corp to count in the 10 financed property rule, because its commercial. This is true, even if you have to sign as the guarantor of that loan on a personal basis. Primarily because the loan is in the name of the Sub S or the C Corp.  

So look at investing like this; you should hold all properties in your personal name up to the point of 10 financed properties. From there you move as many properties as you wish to open slots for into the Sub S and get portfolio financing on them. By doing this, you can always buy your new homes as a Fannie Mae loan. I would age out my oldest financed property or the properties with the smallest balance to the portfolio loan, and minimize the higher rate that way. 

Below in the actual Fannie Mae guidelines. 

See below from the reference guide for FNMA multiple financed properties in MyKey. If they own 25% or more of the LLC or partnership then it would count.

Type of Property Ownership to include in Financed Property Count:

 Joint ownership of residential real estate. (This is considered to be the same as total ownership of an individual property).

Note: Other properties owned or financed jointly by the borrower and co-borrower are only counted once.

 Joint or total ownership of a property that is held in the name of a corporation or S-corporation, even if the borrower is the owner

of the corporation; however, the financing is in the name of the borrower.

 Obligation on a mortgage debt for a residential property (regardless of whether or not the borrower is an owner of the property).

 Ownership of property that is held in the name of a limited liability company (LLC) or partnership where the borrower(s) have

an individual or combined ownership in the LLC or partnership of 25% or more, regardless of the entity (or borrower) that is the

obligor on the mortgage.

 Ownership of a property that is held in the name of an LLC or partnership where the borrower(s) have an individual or combined

ownership in the LLC or partnership of less than 25% and the financing is in the name of the borrower.

 Ownership of a manufactured home and the land on which it is situated that is titled as real property

Type of Property Ownership NOT to include in Financed Property Count:

 Ownership of commercial real estate.

 Ownership of a multifamily property consisting of more than four dwelling units.

 Joint or total ownership of a property that is held in the name of a corporation or S-corporation, even if the borrower is the owner of the corporation and the financing is in the name of the corporation or S-corporation.

 Ownership in a timeshare.

 Ownership of a vacant (residential) lot.

 Ownership of a property that is held in the name of an LLC or partnership where the borrower(s) have an individual or combined ownership in the LLC or partnership of less than 25% and the financing is in the name of the LLC or partnership.

 Ownership of a manufactured home on a leasehold estate not titled as real property (chattel lien on the home).